 | |
| Browse | Ask | Answer | Search | Join/Login | |
Understanding bonds
Asked Nov 15, 2006, 09:38 AM
—
2 Answers A company issues $100,000 of its 10-year, 8% bonds to yeild 10% on January 1, Year 1. The bonds pay interest annually on December 31. The bonds were sold with a discount of $12,289. The amount of cash interest paid on the bonds in Year 1 is______________. A. $7,017 B. $8,000 C. $8771 D. $10,000 I said b. $8,000. $100,000 x 8% = 8,000 If this is correct please let me know. If not, don't give me the answer just explain to me how to get the correct answer. I really want to know how this is done. |
| ||||
| I believe that your answer of $8,000 is correct, just the way you got it. Your teacher incuded what I call a "screw factor" into the problem; an unneccessary piece of information intended to screw you up. That extra bit of information would have been needed to find out the % yield to to the buyer of the bond: $8000 return/$87711 invested = 9.12% yield. | ||||
| |
| ||||
| If you wish to explain the answer you believe is right and why you think it is, we will be glad to expalin your answer. I hope others will understand this and not just give people answers to their homeword | ||||
| |
| Thread Tools | Search this Thread |
Add your answer here.
Check out some similar questions!
My ex girlfriend left me a voicemail asking me how I was about a week ago. Then she talked to me early on Valentine's Day but her cousin was on the phone with her and the call was short like 5-10 mintues. Her cousin then called me a few days later with her on HIS phone and the call was short...
I was just wondering what other peoples opinion is on this matter.
Why should people believe that all religious understanding is relative and that no one interpretation is absolute? HANK :confused:
I have two floodlight fixtures on a single switched circuit. Each fixture has a pair of 150 watt bulbs for 300 watts per fixture or 600 watts on the circuit. I want to replace one of the fixtures with a fixture that has a motion detector as is commonly sold in hardware stores. Like the fixture...
View more Finance & Accounting questions Search
